Marielle Smith (SA, Australian Labor Party) Share this | Hansard source

I also rise to speak on the Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025. Our government has a proud history of delivering fairer pay and better conditions for Australian workers, and this bill continues that work. It delivers on our election commitment to protect the penalty rates and overtime of some 2.6 million modern award workers in Australia, many of whom rely on their penalty rates and their overtime to make ends meet.

For too many years award workers across Australia have lived anxiously, concerned about the future of their penalty rates and overtime. They are anxious because they depend on penalty rates and overtime. Without them, their families simply could not make ends meet. Our government has their back. We are ensuring that, for modern award workers, these rates cannot be reduced or substituted by another term that will reduce their take-home pay.

Currently penalty and overtime rates and modern awards can be rolled up into a single rate of pay, leaving some employees worse off, and the rates themselves can be reduced, as we saw in 2017. And of course we know there are moves underfoot now to trade away penalty rates. This anxiety is not unfounded. There is an active submission before the Fair Work Commission in the retail, clerical and banking sectors to trade away the penalty rates of lower paid workers from awards. We are not dealing in hypotheticals here. Workers have had reason to feel anxious, and they're anxious because their penalty rates and their overtime matter.

These entitlements are essential for workers in sectors like retail and hospitality, where too often work happens outside the standard nine-to-five working hours. These are hardworking Australians who keep our country running on weekends, in the evenings, on public holidays, and late nights and through shift work, and they deserve a system that fairly compensates them for these unsociable hours that not only impact them as individuals but impact their families. These hours can impact their health and wellbeing, all to keep our economy running. For those hours spent away from the people these workers love, they should be compensated.

We know that nearly 60 per cent of minimum and award-reliant workers are women and more than 57 per cent are under the age of 35, so this is also a matter of gender equity and intergenerational equity. That is why our government is taking action, and that is why I am supportive of this bill.

In substance, this bill delivers on our government's key election commitments to protect the penalty rates of 2.6 million modern award-reliant workers. It does so by amending the Fair Work Act 2009 to legislate protections to ensure that penalty and overtime rates and modern awards cannot be reduced or substituted by another term that would reduce an employee's take-home pay.

The bill adds a new section, 135A, to the act to establish a clear principle that, when exercising its powers to make, vary or revoke modern awards, the Fair Work Commission must ensure that the specified penalty or overtime rates are not reduced and modern awards do not include terms that substitute employees' entitlements to receive penalty or overtime rates where those terms would have the effect of reducing the additional remuneration any employee would otherwise receive.

The bill ensures award-reliant workers' wages cannot go backwards and that they are fairly compensated for working overtime, unsocial, irregular or unpredictable hours, weekends or public holidays, early mornings and into the night. The bill is designed to be simple, fair and workable.

Employers will continue to be responsible for paying penalty rates in accordance with the relevant modern award. It does not introduce new obligations beyond this requirement. Enterprise bargaining will remain the key pathway for employers to directly negotiate with employees and their representatives to achieve flexibility and productivity gains, including in relation to penalty and overtime rates. The bill is fair. It protects penalty rates and overtime for those workers who rely on them so deeply.

The committee that I am proud to chair, the Education and Employment Legislation Committee, conducted an inquiry into this bill, holding a hearing in Melbourne and receiving numerous submissions. We heard from witnesses from around the country about the impacts of the bill. The evidence we received was powerful and moving. We heard from workers across our economy who rely on their penalty rates and overtime to make ends meet. We heard from workers like Ruth and Emily, who both work in the retail sector. Emily told our committee that penalty rates were essential to making ends meet. Ruth, who has worked at Coles for 30 years, expressed that those who work in retail, if they want a job, have to either do late nights or weekends. Ruth added:

I do Sundays at the moment. It already impacts time with my grandkids, but I can make it up because penalty rates mean I can afford to spoil them a little bit. Without penalty rates, I'd still have to give up my Sundays with them, and there would be no reward.

We also heard from Vince, a security officer, who shared his reliance on penalty rates after his son received a diagnosis. He explained:

The fact that I had days off throughout the week made it possible for me to get him the help he needed with early intervention. … Without the penalty rates, there was no way we could've afforded to keep things moving.

Noah, who works as a school cleaner, explained to our committee:

Lots of these jobs take place at irregular or unusual hours, when people are heading home for dinner or going to sleep. All these family milestones are missed, as well.

The testimony that our committee heard, as well as the real-life experience of so many others, reminds us that behind every paycheque for a penalty rate or overtime is a person—someone making a deep contribution to our community; someone working unsociable hours; someone working late into the night; someone working on weekends; someone often juggling parenting, study, other responsibilities and commitments to their own family; someone who does this to keep our economy running. They deserve compensation for their effort.

These workers rely on penalty rates and overtime to make ends meet, and we rely on these workers to keep our economy moving. The workers who rely on their penalty rates aren't working these shifts because it's a joy to do so; they are working these shifts because they rely on the compensation it brings and what it means for them, their family, their take-home pay, their ability to manage the cost of living and their capacity to provide for their family and the people that they love. Penalty rates and overtime make a real difference for these workers. They are not a luxury. Penalty rates are a lifeline, compensation for unsociable hours and a recognition of this sacrifice, and for many workers they are essential to making ends meet.

These are the Australians whom this bill is for—some 2.6 million modern award wage workers across Australia, working in our supermarkets, working in our call centres, working in banks, in insurance, in cafes and in warehouses—the workers we were so reliant on during the COVID-19 pandemic and who continue to keep our economy moving today. If we didn't have them, our economy just simply wouldn't function as it does. When someone loses their penalty rates, it's not an abstract loss. It is food off the table. It's the difference in covering your electricity bill or falling behind on your mortgage. These workers rely on penalty rates, and they should not be forced to go backwards.

As a government, we have made lifting wages central to our economic plan, and it's why we are ensuring the take-home pay of these workers is protected. We believe in, as the Prime Minister has said so many times, no-one held back, no-one left behind. This legislation draws a clear line in the sand. If an agreement leaves workers worse off, it's not allowed.

Let's remember again who this legislation is about. It's the single mum working weekend shifts at the local supermarket so she can fund the extracurricular activities of her child. It's the university student working night shift so they can pay their tuition, pay their rent and buy their textbooks. It's the bank employee who is working public holidays to save enough for that single family holiday they want to take with their children each year. It's the retail worker who needs their Sunday penalty rates so they can fund their childcare fees through the rest of the week. These aren't just statistics and they're not just stories; they are real people in our economy, keeping our economy moving day in and day out, who rely on their penalty rates and their overtime to make ends meet. They deserve for this place to stand up for them.

Since coming to office, the Albanese Labor government has been utterly focused on delivering real outcomes for working people, backing in workers every step of the way. We've had an active focus on wage growth because we know it is critical with the cost-of-living difficulties that so many workers are facing at the moment. Growth in real wages helps workers with the cost of living. It helps them get ahead. Under our government, wages are up, inflation is down, unemployment is lower and interest rates are falling. The latest unemployment figures show a record number of Australians in work, with over 14.6 million Australians in work in July. The figures released show Australia's unemployment rate remains historically low, falling to 4.2 per cent. We haven't been afraid to legislate when we know that will make an impact on workers' wages. We've funded a wage increase for early childhood educators and aged-care workers—these workers who do critical, life-changing, nation-building work every single day of the week. For too long we have chosen to underpay and undervalue them. Our government has changed that path.

We have legislated to close loopholes in our industrial relations system which were not just leaving workers behind but making workers in our country critically and fundamentally unsafe, which was seeing workers in this country die on our roads because they weren't safe. We've legislated new powers to introduce minimum standards across the gig economy to protect these workers and treat them like employees—these workers who have been fundamentally let down in a system which, before our legislation came into effect, saw companies treat our industrial system with absolute contempt, stomp over every regulation or law that a state or territory government tried to put in place to regulate them and treat workers contemptuously. We legislated to close that loophole and others. We legislated a right to disconnect because we know work is creeping ever deeper into our home and family lives. For those workers who aren't compensated for it, they need that protection under the law. Every step of the way, we back workers. We are not afraid to legislate when necessary, and I'm deeply proud of our record in this space, especially when it comes to closing the loopholes—and I note we celebrate the anniversary of that this week.

This bill stands to protect workers, some 2.6 million modern award wage workers, in our country who rely on their penalty rates and their overtime to make ends meet and these rates of pay to provide for their families. For them, this is compensation for the difficult and unsociable hours they work and the work they do which keeps our economy running. They could not survive without their penalty rates and their overtime, and we could not survive without them. These workers are essential, and we are standing up for them.

I want every single award worker who relies on their penalty rates and overtime to let go of the anxiety they are feeling, and to know and feel confident that they will be properly compensated for their work and that they can rely on their penalty rates and overtime into the future. This is about recognising the value of every single worker and every single shift they take. We are protecting penalty rates and overtime for the award workers in our country who rely on them so deeply.

I am very proud of this bill. I know the impact it will have on these workers across our economy. To them: we are grateful for the work you do and we see the unsociable hours you work and the sacrifices you make. That's why we, as a Labor government, are standing up for you to protect your penalty rates and your overtime. That is what you can expect of a Labor government in the future.